Appeal details
Counselvise Citation
[2022] 104 COUNSELVISE.COM (IT) 1631 (ITAT-SURAT)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
26-09-2022
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
25-09-2022
Assessment Year
2016-2017
Appeal Filed On
22-05-2022
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRIPAWAN SINGH, JM &DR. A.L.SAINI, AM आयकर अपीलसं./ITA Nos.148 to 154/SRT/2022 (िनधाŊरणवषŊ / Assessment Years: (2012-13 to 2018-19) (Virtual Court Hearing) Sanjaybhai Arjunbhai Patel 37, Shreeji Plaza, Tata Road, No.1, Opera House, Mumbai- 400004 Vs. Deputy Commissioner of Income-tax Central Circle-1, Surat, Aaykar Bhavan, Surat- 395001 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No.: ADIPP 4533G (Appellant ) (Respondent) आयकर अपीलसं./ITA Nos.155 to 159/SRT/2022 (िनधाŊरणवषŊ / Assessment Years: (2014-15 to 2018-19) Kashyap Maganbhai Vaghasiya 174 Shree Gadhpur Township, Pasodara Gam, TA-Kamrej, Surat-395206 Vs. Deputy Commissioner of Income-tax Central Circle-1, Surat, Aaykar Bhavan, Surat- 395001 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No.: AVDPV 6623 L (Appellant ) (Respondent) Assessee by : Shri P.M. Jagasheth, C.A Respondent by : Shri Vinod Kumar, Sr-DR सुनवाईकीतारीख/ Date of Hearing : 26/09/2022 घोषणाकीतारीख/Date of Pronouncement : 27/09/2022 आदेश / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: Captioned set of twelve appeals filed by two assessees, pertaining to assessment years 2012-13 to 2018-19 (in appeal-wise), are directed against the order passed by the Ld. Commissioner of Income-tax (Appeals)-4, Surat (in short “Ld. CIT(A)”) all dated 21.04.2022, which in turn arise out of Page | 2 ITA No.148-159/SRT/2022 A.Ys.12-13 to 18-19 Sanjaybbhai A Patel & Kashyap M Vaghasiya separate penalty orders passed the Assessing Officer under section 271(1)(b) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) all dated 01.02.2021. 2. Since the issues involved in all the appeals are common and identical except variance of amount, therefore we have clubbed all these appeals and heard together, and a consolidated order is being passed for the sake of convenience and brevity. The facts as well as grounds of appeal raised by assessee in the case of Sanjaybhai Arjunbhai Patel in ITA No.148/SRT/2022, for assessment year 2012-13, have been taken into consideration for deciding these appeals en masse. 3. The grounds of appeal raised by the assessee in “lead” case in ITA No.148/SRT/2022, for assessment year 2012-13, are as follows: “1.On the facts and in the circumstances of the case as well as law on the subject, the learned commissioner of the Income Tax (Appeals) has erred in confirming the action of the assessing officer in levying penalty of Rs.5,000/- u/s 271(1)(b) of the I.T. Act, 1961. 2. It is therefore prayed that the above penalty may please be deleted as learned members of the Tribunal may deem it proper.” 4. The facts of the case which can be stated quite shortly are as follows: During the course of assessment proceedings, following notices were issued u/s 142(1) of the Act: (i) Assessing officer issued notice under section 142(1) of the Act dated 02.12.2020: The date fixed for compliance of this notice was on 14.12.2020. The Assessee took adjournment on 14.12.2020 and asked the assessing officer for any date, as may be convenient to him. Page | 3 ITA No.148-159/SRT/2022 A.Ys.12-13 to 18-19 Sanjaybbhai A Patel & Kashyap M Vaghasiya (ii) Assessing officer issued second notice under section 142(1) of the Act dated 16.12.2020: The date fixed for compliance of this notice was on 28.12.2020. Again assessee took adjournment on 28.12.2020 and asked assessing officer for any date as may be convenient. After this date, the compliance date was fixed on 01.01.2021, however, assessee took adjournment. 5. After that assessee has filed before the assessing officer, the relevant documents and evidences. The assessing officer, in his assessment order has mentioned that assessee has submitted required documents and details for making the assessment. The relevant para of the assessment order dated 31.05.2021, framed under section 143(3) read with section 153A of the Act, is reproduced below: “3.During the year under consideration, the assessee has shown to have received income from profit and gains from business or profession and is also a partner in diamond manufacture-exporter firm, M/s Om Anand Exports. The assessee has time to time furnished online submissions through the ld.Authorised Representative, Chartered Accountants, M/s Jagasheth & Co.” 6. However, the assessing officer in his penalty order under section 271(1)(b) of the Act, dated 01.02.2021, held that assessee has made no response to the questionnaire, only adjournment has been filed, even when two months have elapsed from the date of issue of notice u/s 142(1) of the Act. Therefore, assessing officer concluded that assessee has failed to comply with the notice without any reasonable cause and is therefore liable to be penalized u/s 274 r.w.s. 271(1)(b) of the Act. In view of the above facts, the Assessing Officer levied penalty u/s 274 r.w.s. 271(1)(b) of the Act, at Rs. 20,000/- for two counts of non-compliance. 7. Aggrieved by the order of ld CIT(A), the assessee carried the matter in appeal before the Ld. CIT(A) who has partly deleted the penalty imposed by the assessing officer, observing as follows: Page | 4 ITA No.148-159/SRT/2022 A.Ys.12-13 to 18-19 Sanjaybbhai A Patel & Kashyap M Vaghasiya “5.1 I have perused the penalty order and the submissions of the AR of the appellant. Brief facts of the case are that the AO has levied penalty u/s 271(1)(b) for non-compliance of the notices issued u/s 142(1) dated 02.12.2020 and 16.12.2020. The AR of the appellant submitted that the appellant during the assessment proceedings submitted all the necessary details and complied with all the notices issued by the Assessing Officer from time to time. Regarding the non- compliance of notice of hearing dated 02.12.2020 and 16.12.2020 requiring appellant to attend/furnish details on 14.12.2020 and 28.12.2020, the appellant duly filed letter for adjournment on 14.12.2020 and 28.12.2020 itself. The non- compliance was due to heavy workload of audit work and coupled with Covid-19 pandemic, the AR’s office was working with proper safety measure. Hence, it should not be considered as default for non-compliance of legal notice and penalized for the same u/s 271(1)(b) of the Act. On perusal of the submission, it is noticed that complete details were filed by the appellant during assessment proceedings and subsequently, the assessment order has been finally passed u/s 143(3) r.w.s. 153A of the Act. This proves that necessary compliance has been made eventually before the assessment order was passed by the AO. 5.2 There is some merit in the submissions of the AR that order was ultimately passed u/s 143(3) and not u/s 144 of the Act and hence, penalty u/s 271(1)(b) of the Act is not leviable. At the same time, AO also is right in saying that inspite of giving 2 opportunities the Appellant failed to comply with the requirements given in the notices issued u/s 142(1) of the Act. 5.3 As far as the first notice u/s 142(1) is concerned, the appellant has filed for adjournment in time and AO is bound to give at lest one adjournment to the appellant. Hence, there is no default as such of notice dated 02.12.2020 which was to be complied by 14.12.2020 but the appellant filed the adjournment letter on 14.12.2020. Therefore, penalty u/s 271(1)(b) of the Act of Rs.10,000/- levied for first default is deleted. 5.4. The second notice was issued on 16.12.2020 asking the appellant to comply by 28.12.2020. The compliance date was extended initially to 01.01.2021 and subsequently to 11.01.2021 but inspite of it, the appellant did not comply with the notice. Hence, in my opinion, the AO was reasonable in giving sufficient time to the appellant but inspite of that appellant did not comply with the notice. Considering these facts and the fact that ultimately details were filed before the completion of assessment, it would be just to sustain the penalty of Rs.5,000/- for second default. Appellant gets relief of Rs.15,000/-.Ground No.1 is partly allowed.” 8. Aggrieved by the order of Ld. CIT(A), the assessee is in further appeal before us. 9. Shri P.M. Jagasheth, Learned Counsel for the assessee argued that during assessment stage, the assessee sought adjournment on 14.12.2020 and Page | 5 ITA No.148-159/SRT/2022 A.Ys.12-13 to 18-19 Sanjaybbhai A Patel & Kashyap M Vaghasiya thereafter assessee sought another adjournment on 28.12.2020. Then after, the assessee has submitted the required details and documents before the Assessing Officer from time to time, as evident from para no.3 of the assessment order. The Ld. Counsel also contended that order was passed by the Assessing Officer on merits u/s 143(3) r.w.s. 153A of the Act, vide assessment order dated 31.05.2021. Since the assessment order has been passed on merit and the assessee has submitted the required details and documents after taking appropriate adjournments, therefore the assessee should not be penalized. The Ld. Counsel also submitted that these required details and documents were submitted before the Assessing Officer in difficult conditions of severe Covid-19 pandemic period. Hence, Ld. Counsel, this way, prays the Bench that assessee made sufficient compliance of the notices issued by Assessing Officer, therefore penalty may be deleted. 10. On the other hand, ld Sr. DR for the Revenue submits that during the assessment proceedings, assessee took only adjournments therefore Assessing Officer was right in levying penalty under section 271(1)(b) of the Act. This way, Ld. Sr.DR for the Revenue reiterated the stand taken by the Assessing Officer which we have already noted in our earlier para and is not being repeated again for the sake of brevity. 11. We have heard both the parties and perused the materials available on record. We note that Ld. Counsel for the assessee, assailing the imposition of penalty, has pleaded before us that Assessing Officer had imposed penalty in an arbitrary manner. The ld Counsel pointed out that on two occasions, the assessee had taken adjournments. In order to make paper book/compilation of documents and evidences, the assessee took few adjournments and in fact, later on, the assessee has submitted the required details and documents before the assessing officer which is acknowledged Page | 6 ITA No.148-159/SRT/2022 A.Ys.12-13 to 18-19 Sanjaybbhai A Patel & Kashyap M Vaghasiya by the assessing officer in the assessment order itself, and the assessment order was passed u/s 143(3) r.w.s. 153A of the Act. 12. We find force in the arguments of ld Counsel, and noticed that Assessing Officer while framing the assessment order u/s 143(3) r.w.s. 153A of the Act, has himself mentioned in the assessment order that assessee submitted details and documents vide para no.3 of the order, which is reproduced below: “3.During the year under consideration, the assessee has shown to have received income from profit and gains from business or profession and is also a partner in diamond manufacture-exporter firm, M/s Om Anand Exports. The assessee has time to time furnished online submissions through the ld.Authorised Representative, Chartered Accountants, M/s Jagasheth & Co.” 13. This shows that assessment order, u/s 143(3) r.w.s. 153A of the Act, was framed by assessing officer after getting the required documents and details. Therefore, we note that when the assessee has submitted the required details and documents during the scrutiny assessment proceeding and based on these details and documents, the Assessing Officer has framed the assessment on merit. In view of this, we note that there was no wisdom in the assessment order in respect of alleged non-compliance. Therefore, we note that when the Assessing Officer has framed the assessment order u/s 143(3) r.w.s. 153A of the Act and assessment order has not been passed u/s 144 of the Act, therefore the penalty u/s 271(1)(b) of the Act, for non- compliance should not be levied. To pass order by the Assessing Officer u/s 143(3) r.ws. 153A of the Act means that subsequent compliance in the assessment proceedings was considered as good compliance and the defaults committed earlier was ignored by the Assessing Officer. 14. We find that the instant appeal is squarely covered by the decision of the Co-ordinate Bench of ITAT Delhi in the case of Akhil Bhartiya Prathmik Page | 7 ITA No.148-159/SRT/2022 A.Ys.12-13 to 18-19 Sanjaybbhai A Patel & Kashyap M Vaghasiya Shikshak Sangh Bhawan Trust vs ACIT 5 DTR 429 (Delhi Tribunal) wherein the Coordinate Bench in paras 2.4 and 2.5 has held as under :- “2.4 Coming to the issue of recording of satisfaction, it may be mentioned that mere initiation of penalty does not amount to satisfaction as held by Hon’ble Delhi High Court in the case of CIT vs. Ram Commercial Enterprises Ltd. (2001) 167 CTR (Del) 321 : (2000) 246 ITR 568 (Del). In absence of recording of the satisfaction in the assessment order, mere initiation of penalty will not confer jurisdiction on the AO to levy the penalty. 2.5 We also find that finally the order was passed under s. 143(3) and not under s. 144 of the Act. This means that subsequent compliance in the assessment proceedings was considered as good compliance and the defaults committed earlier were ignored by the AO. Therefore, in such circumstances, there could have been no reason to come to the conclusion that the default was willful ” 6. As the facts of this case are identical, we hold that the imposition of penalty u/s 271(1)(b) of the Act was patently wrong, specially in view of the fact that the impugned assessment order has been passed u/s 143(3). While setting aside the impugned order, we direct the Assessing Officer to delete the penalty.” 15. We also note that Ld. CIT(A) sustained penalty at Rs.5,000/- partly for second default. However, the quantum of penalty u/s 271(1)(b), for each default is Rs.10,000/-, which is mentioned in clause (ii) sub-Section-1 of Section 271(1)(b) of the Act. Therefore, we note that penalty sustained by the Ld. CIT(A) is not in accordance with the provision of Section 271(1)(b) and clause (ii) of that Section. We note that Law is well settled that when the statute requires to do certain thing in certain way, the thing must be done in that way or not at all. Other methods or mode of performance are impliedly and necessarily forbidden. The aforesaid settled legal proposition is based on a legal maxim 'Expressio unius est exclusion alteris', meaning there by that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner and following of other course is not permissible. (Nazir Ahmed v. King Emperor AIR 1936 PC 253; Ram Phal Kundu v. Kamal Sharma [2004] 2 SCC 759 and Indian Bank's Association v. Devkala Consultancy Service AIR 2004 SC 2615). Similar view has been expressed in the Orissa Rural Housing Development Page | 8 ITA No.148-159/SRT/2022 A.Ys.12-13 to 18-19 Sanjaybbhai A Patel & Kashyap M Vaghasiya Corpn. Ltd, 343 ITR 316 (Orissa). Hence, ld CIT(A) has erred in sustaining the part penalty of Rs.5000/-, u/s 271(1)(b) of the Act, therefore order passed by the ld CIT(A) is not in accordance with the provisions of law. 16. Based on above facts and circumstances, we are not inclined to accept the contention of the Assessing Officer in imposing the penalty u/s 271(1)(b) of the Act, therefore we delete the penalty. 17. Considering the facts that we have already allowed assessee’s appeal in “lead” case in ITA No.148/SRT/2022 for A.Y.2012-13, the facts and grounds raised in other appeals are identical and similar, therefore our instant adjudication shall apply mutatis mutandis to the aforesaid other appeals of Assessees also. 18. Before parting, we would like to state that in ITA Nos.158, ITA No.159/SRT/2022,ITANo.153/SRT/2022 and ITANo.154/SRT/2022, the Assessing Officer levied penalty under section 272A(1)(d) of the Act, which is pari materia with Section 271(1)(b) of the Act. Therefore, our instant adjudication shall apply to these appeals and penalty levied u/s 272A(1)(d) of the Act is hereby deleted. 19. In combined result, all the twelve appeals of the assessees are allowed. A copy of instant order be placed in the respective case files. Order is pronounced on 27/09/2022 by placing the result on the Notice Board. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat/िदनांक/ Date: 27/09/2022 Dkp Outsourcing Sr.P.S. Page | 9 ITA No.148-159/SRT/2022 A.Ys.12-13 to 18-19 Sanjaybbhai A Patel & Kashyap M Vaghasiya Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr.CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Surat
